- An open source alternative to ChatGPT
- Dallas is about to introduce a ‘robo-taxis’ service
- Japan’s lunar exploration program does not go according to plan…
Dear Reader,
In what is perhaps the largest publicly announced AI-related workforce strategy, IBM CEO Arvind Krishna recently made some predictions about the impending labor market turmoil.
Announcements like this are useful because they provide early insight into where and how large companies are adopting the latest breed of powerful artificial intelligence (AI). Such information provides both investment implications as well as useful information for us regarding future career choices.
Krishna’s plan is bold and probably unpopular with some IBMers. He announced that the company plans to pause hiring for roles it believes can be replaced by AI.
Broadly speaking, Krishna targeted back-office functions, specifically HR functions. He believes many of the HR functions will work better with his AI technology, and he suggests that at least 30% of back-office jobs are likely to be replaced in the next five years. bottom.
Given that IBM has approximately 26,000 back-office employees, a 30% reduction would result in the elimination of 7,800 jobs. That may sound daunting, but it really is. But that’s only 3% of IBM’s total workforce of about 260,000.
But keep in mind that IBM is just one company. Medium to large enterprises, and hopefully bloated and wasteful governments, will adopt this technology to improve both operations and customer satisfaction. And companies that don’t will quickly become uncompetitive.
Obvious jobs that will be replaced by AI in the near future include jobs in customer service, administrative operations, accounting and bookkeeping, marketing, order taking (such as restaurants), data entry, and data analysis. These are just a few of the obvious categories.
Krishna is tasked with modernizing IBM and getting the company back on track for growth after years of stagnation and declining competitiveness. I wouldn’t be surprised if he talks candidly about his plans to “leverage” AI at his IBM.
But even if most executives don’t make Krishna-like bold declarations, it’s certainly not the only thing they think about. They are developing their own near future plans to do exactly the same.
The reality is that any technology that can reduce operating expenses, increase gross margins, improve customer satisfaction and increase sales will be adopted. quickly. And that means Krishna may be too conservative with his projection. This change will occur within his 5 years and his 30+% of back office functions will certainly change.
We’re looking for AI companies that enable this kind of workforce transformation and companies that are rapidly adopting this technology to give them a competitive advantage.
A perfect example, I wrote about Palantir on May 3rd. He emphasized that adopting generative AI in its existing product offering is a smart strategy that allows the company to quickly leverage its existing customer base into new sales.
Since then, Palantir’s stock has risen about 35%, but most of that has happened in the last two days after Palantir’s earnings release. The news was clearly good. Palantir, already known as an AI/ML (machine learning) company, announced its earnings for the quarter and said it expects to remain profitable for the rest of the year.
But more impressive was Palantir’s CEO’s comments about the demand for new AI products that were “unprecedented.”
Hugging Face to Compete Directly with OpenAI…
Artificial intelligence (AI) startup Hugging Face has released a new generative AI. It’s called Hug Chat. And this is very competitive with OpenAI’s ChatGPT. But there are some important differences…
Hug Face is backed by venture capital (VC) powerhouses Sequoia and Lux Capital. Also, unlike OpenAI, we are pursuing an open source model for HuggingChat. That means the code is open for anyone to use. It’s not proprietary like ChatGPT’s code.
Additionally, organizations are free to modify the HuggingChat code to create their own applications based on original generative AI. Importantly, organizations doing this do not have to pay Hugging Face a license fee. A major cost to Hugging Face users is the cost of computing power to further train and operate the HuggingChat generation AI.
This is important as the industry is desperate to have ChatGPT alternatives. There are several reasons.
First, as mentioned earlier, ChatGPT is proprietary. No one can review the code or dataset the AI was trained on. And OpenAI controls who can license its technology.
Additionally, Microsoft owns a controlling interest in OpenAI. That means Microsoft can go all out if it wants to. In fact, it already does. Microsoft is in the process of selecting companies to allow access to ChatGPT and GPT-4.
For example, Microsoft does not allow Alphabet (Google) access to ChatGPT/GPT-4. it’s a competitor. After all, Microsoft is doing everything it can to take the web browsing business away from Google. The company’s entire strategy is built around OpenAI’s technology, and it has already paid at least $13 billion to control it.
Therefore, we expect HuggingChat to become very popular very soon. The code is transparent, no strings attached, and the AI can basically do anything ChatGPT can do. It’s not quite as advanced as OpenAI yet, but it’s a problem that can be solved quickly with additional capital and labor. My guess is that HuggingChat is about three months behind ChatGPT.
Therefore, I fully expect Hugging Face to use this product launch to raise another large VC raise. This will give the company the capital it needs to train HuggingChat and release a newer, smarter version as early as the third quarter of this year.
What we are seeing is a natural evolution in the industry. It was never going to be just ChatGPT. The potential of this technology is already deeply understood, as is the ability to monetize it. That is why we are already witnessing a veritable arms race to dominate the generative AI space over the next few years.
Cruise is making big strides with robo-taxis…
Big news from autonomous driving startup Cruise. The company made just two big announcements.
Mind you, Cruise is a self-driving company that was partially acquired by General Motors (GM) in 2016. And last February, Cruise launched a new self-driving ride-hailing program in San Francisco.
Initially, cruises were only allowed to operate between 10pm and 5am local time, when roads are less busy. But Cruise just announced that it has received approval to operate a 24/7 robotaxi service in San Francisco. This is a big milestone.
That’s not all…
Cruise also announced that it is preparing to launch a robo-taxis service in Dallas, Texas. It will be the next city.
This is a big move. Dallas is a rapidly growing metropolitan area. In fact, as of 2021, Dallas-Fort Worth was the fastest growing metropolitan area in the country.
And looking at Dallas, it should be much easier to handle self-driving taxis than San Francisco. Dallas is even more extensive. Compared to San Francisco, the streets are flat and simple. Also, the weather is generally better and fog free than in San Francisco.
Therefore, I think this is a great option for Cruise’s next robotaxi service.
For Dallas readers, this new service should be available in the coming months. If anyone decides to test it, I’d love to hear about it.
The latest attempt at a private moon landing…
Back in December, a Japanese private company called iSpace planned to land a spacecraft on the moon. The company was his third private company to take on this daunting task.
iSpace’s lunar lander is called “Hakuto-R”. Below is an artist’s drawing of what it looks like on the moon.
Source: iSpace
And unfortunately, all we can see on the moon are artist renderings. That’s because the ship crash-landed on the moon.
The lander managed to enter lunar orbit. That alone is a big win. From there, the spacecraft began its descent to the lunar surface…but then the control station in Tokyo lost contact with the spacecraft.
A post-mortem examination revealed that the Hakuto-R had run out of fuel to slow down during its lunar descent. The lander probably shattered on impact.
This shows how difficult it is to land a spacecraft on the moon. With little gravity and no atmosphere, a large amount of fuel is required to slow the spacecraft for controlled descent and landing.
That makes iSpace the third private company to fail to do so. The last two of him date back to 2019.
That said, this shouldn’t come as a surprise. You should expect a fair amount of trial and error when it comes to space exploration.
Most people don’t know this, but even NASA had failed lunar missions before Apollo 11. In 1958, NASA sent the Pioneer 1 probe on a mission to achieve lunar orbit. However, the probe failed to reach orbit and eventually crashed into Earth’s atmosphere and was destroyed.
But what’s interesting is that these early attempts are precursors to what’s to come. Private companies will not only launch spacecraft into orbit, but will ultimately explore the solar system for minerals and resources that are essential to the continued existence of humans in space.
And thanks to SpaceX and the significantly lower cost of launching to orbit, this new space economy is now accessible to large and small companies alike.
nice to meet you,
Jeff Brown
Editor, cutting edge
